Author Question: A legal reserve in life insurance is a result of A) premium taxes payable by life insurance ... (Read 137 times)

rl · **on:** Jul 11, 2018

A legal reserve in life insurance is a result of

A) premium taxes payable by life insurance companies being postponed during the early policy years.
B) dividends being paid to policyholders.
C) inadequate premiums in the early policy years being subsidized by investment earnings.
D) excess premiums in the early policy years being invested at compound interest.

Question 2

The net amount at risk for an ordinary life insurance policy is the difference between the

A) present value of future benefits and the present value of future premiums.
B) face amount of the policy and the total premiums that have been paid.
C) face amount of the policy and the legal reserve.
D) annual premium and the annual policyholder dividend.